KARNATAKA INDUSTIRAL POLICY 2014- · PDF fileMore than 2500 IT companies ... Strengthening of...
Transcript of KARNATAKA INDUSTIRAL POLICY 2014- · PDF fileMore than 2500 IT companies ... Strengthening of...
Industrial growth- To mitigate poverty and unemployment.
To promote higher capital formation.
To improve per capita income level.
To observe surplus workforce.
To realize the above benefits state accords high priority for industrial development
State announces industrial policy once in five years.
New industrial policy is for the period 2014-19.
New industrial policy has accommodated national manufacturing policy of 2011.
Karnataka manufacturing taskforce (MTF) constituted by state Government to study- the manufacturing sector in Karnataka and suggest for policy formation.
More than 1054 large and medium manufacturing industries
More than 2500 IT companies
More than 600 textile units
Many big brands operating such as Toyota Kirloskar, TVS, L&T, Bosch, Biocon, GSK Pharma, HAL, Airbus, Boeing, Honeywell etc.
More than 4.8 lakh MSMEs providing more than 28 lakh jobs with investment of Rs. 18,000 crore
Largest exporter of silk and silk products
Development of 145 industrial area spread over 33,513 acres by KIADB
KIADB acquired 44,704 acres of land under Single Unit Complex scheme
KSSIDC allotted plots to 13,513 units in 174 industrial estates
Installed capacity of Power generation of 14,159 MW
Encouragement to renewable energy sources
30,000 MW of potential renewable energy
Hydel power generation throughout the year
Water Scenario
Karnataka accounts for 6% of countries surface water
Has got 7 river basins
Priority for supply of water for industrial projects along with drinking water and irrigation
Based on the requirement of the industries water made available
320 KM of coastal line and 2 major ports at Mangalore and Karwar
10 minor ports
Connection of ports to national highway
Huge network of road and railway transportation across the state
5 functional airports of which 2 are international airports
Logistic parks are being developed
Metro rail in Bangalore
Founded Mysore bank in 1913
Founded Mysore university in 1916 to impart skills among students
Founded Government Soap factory at Mysore in 1916, today it Is producing world famous Mysore sandal soap
Founded Government Engineering College at Bangalore in 1917
Founded Jayachamarajendra Polytechnic Institute
Revived the Mysore Iron and Steel works at Bhadravathi
Built the Krishnasagara Dam
Started the Sharavathi Hydro Electric project at Jog falls
Built the Bangalore- Mysore railroad, Bhatkal harbour
Founded Mysore Paper Mill
Contents
Vision of the Policy
Objectives of the Policy
Glimpses of incentives available
Policy measures
Annexure for eligibility for incentives, concessions and benefits
Implementation Mechanism
Role of Cost and Management Accountants
Building a prosperous Karnataka through inclusive sustainable and balanced industrial development
creating large employment opportunities.
Objectives of the Policy
Maintain an industrial growth rate of 12 % per annum.
Enhance the contribution of manufacturing sector to the State GDP
Attract investment of ` 5.00 Lakh crore
Create employment opportunities for 15 Lakh persons
Create an environment to enhance ease of doing business in the State
Exemption from entry tax
Interest free loan availment
Exemption from stamp duty
Exemption from payment of electricity tariff to focused ultra mega and focused super mega enterprises.
Concessional registration charges
Reimbursement of land conversion fee
Investment subsidies etc.
Policy Measures includes the following…
Creation of quality infrastructure with comprehensive facilities
Human resource development through capacity building and skill up-gradation
Facilitation Mechanism and Procedural Reforms
Encouragement for Export Promotion
Classification of Taluks into zones
Promotion of Micro, Small & Medium Enterprises (MSMEs)
Special thrust for encouraging SC/ST entrepreneurs and Encouragement to Women Entrepreneurs
Encouragement to Women Entrepreneurs
Support for R&D and Digital Direct Manufacturing
Incentives and concessions for Large, Mega, Ultra Mega, Super Mega enterprises
Additional Package of Incentives & Concessions to Focused Manufacturing Sectors and service enterprises
Policy measures- Creation of quality infrastructure with comprehensive facilities
Establishment of new industrial areas through KIADB
Readily available land
Plots allotted only after complete development of the industrial area
Adequate availability of power, water and transportation for industrial areas
Proposed to acquire 40,000 acres of land
Information about availability of land in KIADB website
Establishment of industrial corridor
Chennai-Bangalore-Chitradurga
Bangalore-Mumbai economic corridor
State industrial corridor: Bangalore-Mandya-Mysore-Chamrajnagar,
Chitradurga-Bellary-Gulbarga-Bidar, Dharwad-Koppal-Raichur, Bangalore-Hassan-Mysore, Tumkur-Shimoga-Honnavar, Raichur-Bagalkot-Belgaum
Policy measures- Creation of quality infrastructure with comprehensive facilities (Continuation..)
Proposed to notify Special investment region
Dharwad, Gadag, Haveri and Belgaum Districts
Development of areas as industrial nodes
Up-gradation of Infrastructure in existing industrial areas and estates
Maintenance of industrial areas
Industrial township areas in Mysore, Peenya, Bommasandra, Belgaum, Hubli
Uniform guidelines for fixing property tax, development cess
Establishment of Industrial Areas and Estates by Private Investors or through PPP or in association with other Government agency
Policy measures- Creation of quality infrastructure with comprehensive facilities (Continuation..)
Strengthening of Government tool and Training Centre
Suvarna Kayaka Kaushalyabhivruddhi Yojane (SKKY) scheme
Scheme of Modular Training Program of Director General of Vocational Training
Encouragement of Industrial Training Institutes
State level body to coordinate the requirements of the industry
On the job training- ITI and diploma passed candidates are provided on the job training with stipend
Skill development courses across the state
Upgraded virtual learning environment
Establishment of sectoral training institutes
Policy measures- Human resource development through capacity building and skill up-gradation
Industry Place
Machine Tools Peenya / Tumkur
Aerospace HAL / Devanahalli
Foundry/Casting Belgaum
Auto Bidadi / Narsapura
Agro/Food Gulbarga / Bijapur
Electronics Electronics City / Hosur Road / Whitefield
Chemicals and Fertilizers Jigani / Haveri / Mangalore
Pharmaceuticals and FMCG K R Puram / Hoskote
Consumer Durables Whitefield / Hosur Road
Plastics and Rubber Mysore
Textiles Peenya / Mysore Road
Following Sectoral Training Institutes are proposed as part of HRD
Policy Measures- Facilitation Mechanism and Procedural Reforms
Single Window Clearance Mechanism
Regulatory and statutory approvals
Nodal officer appointed for follow ups
Online receipt of all applications
Online project monitoring system
Handbook for investors for guiding
Simplification of regulatory procedures
Reduce time and cost compliance
Proposed to abolish trade licence to all industries
simplify procurement of land and for speedy conversion of agriculture land
Simplified procedure for acquiring land upto 30 acres and permitting deemed conversion
Policy measures- Classification of Taluks into zones
Analysis show that most of the taluks are backward
Focused effort to increase industrial investment in backward taluks
The following classifications made
Hyderabad Karnataka Taluks
Zone 1 Most backward taluks, total 20 taluks
Zone 2 More backward taluks, total 11 taluks
Other than Hyderabad Karnataka Taluks
Zone 1 Most backward taluks, total 23 taluks
Zone 2 More backward taluks, total 51 taluks
Zone 3 Backward taluks, total 62 taluks
Zone 4 Industrial developed taluks 9 taluks
Policy measures-Promotion of Micro, Small & Medium Enterprises (MSMEs)
Infrastructure support through KIADB, KSSIDC
District level single window clearance for land allotment
Venture capital fund for startup enterprises and credit linked capital subsidy scheme
Easy loan under cluster based approach
Encouragement of Technology adoption and up-gradation
Quarterly workshop and seminar for MSMEs from Vishweshwaraya Trade Promotion Centre and Karnataka Council for Technological Up-gradation
Marketing support through bi-annual vendor development event
Assistance for participation in international trade fairs/exhibitions
Reduction in inspections of MSMEs by various line departments
Easy regulatory approvals /clearances for the MSME projects
Policy measures- Promotion of Micro, Small & Medium Enterprises (Continuation..)
Ongoing supportive schemes/programs for development of MSMEs
Venture capital fund for small and medium enterprises
Kaigarika Vikasa Yojane
Suvarna Kayaka Kaushalya Abhivruddi Yojane with revised guidelines
Living cum work sheds and improved tool kits to SC / ST artisans.
Modernization / Technology / Training programme
Handicraft Gurukula Training Institute
Specialized skill development institutions
Support for promotion of Khadi, Artisan and Coir sector
Policy measures-Promotion of Micro, Small & Medium Enterprises (Continuation..)
Incentives and Concessions to MSMEs
Investment promotion subsidy (% on Value of Fixed Assets)
Area Micro Small Medium
Hyd-Ktk
Zone 1 30%, Max 18 Lakh 25%, Max 45 Lakh 20%, Rs 55 Lakh
Zone 2 25%, Max 15 Lakh 20%, Max 40 Lakh 15%, Rs. 50 Lakh
Other than Hyd-Ktk
Zone 1 25%, Max 15 Lakh 25%, Max 40 Lakh 20%, Rs. 50 Lakh
Zone 2 20%, Max 12 Lakh 20%, Max 30 Lakh 15%, Rs. 40 Lakh
Zone 3 15%, 9 Lakh 15%, 20 Lakh 10%, Rs. 30 Lakh
Zone 4 Nil Nil Nil
Policy measures-Promotion of Micro, Small & Medium Enterprises (Continuation..)
Incentives and Concessions to MSMEs
Exemption from stamp duty and reimbursement of land conversion fee
Other Incentives
Exemption from entry tax (100% exemption on entry of P&M)
Subsidy for Setting up Effluent Treatment Plant (50% of the cost)
Interest Subsidy for Micro Enterprises (5% subsidy on term loans)
Exemption from Tax on Electricity Tariff (100% exemption for different period)
Water Harvesting / Conservation Measures
Energy Conservation (10% of capital cost)
Zones Hyd-Ktk Other than Hyd-Ktk
Zone 1 100% 100%
Zone 2 100% 100%
Zone 3 NA 75%
Zone 4 NA Nil
Policy measures-Promotion of Micro, Small & Medium Enterprises (Continuation..)
Incentives and Concessions to MSMEs
Technology up-gradation, Quality Certification
Incentive and concession Quantum and Zone
Interest subsidy on Technology Up-gradation Loan
5 % on loans availed from KSFC & Scheduled commercial banks- All zones
ISO Series Certification 75% of cost (max. `75,000)- Except zone 4
BIS Certification 50%of fees payable to BIS (max. ` 20,000)- All Zones
Technology Adoption 25% of cost (max. `50,000)
Technology Business Incubation Center 25% of the cost (max: `50.00 lakh)
Recycling of electronic waste and plastic waste Additional investment promotion subsidy of 5% (Max 10 Lakh)- Except zone 4
Policy Measures- Encouragement for Anchor Industries
To encourage investments in taluks where no industries with investments above Rs. 250 crore and direct employment of 150 persons
Anchor industries meaning: The first 2 manufacturing enterprises providing a min employment of 150 persons with min investment of Rs. 250 crore.
State Govt proposes to promote anchor industries in at least 20 taluks. At present there are 135 taluks without anchor industries
Anchor industries are eligible for the following subsidies
Investment subsidy of Rs. 20 crore in HK Zone and Rs. 15 crore in all other Zones.
If anchor industries invests more than Rs. 1000 crore-
Interest free loan equal to 100% of net VAT plus CST from the commencement of commercial production for 18 years not exceeding 125% of the value of Fixed Assets
Loan availed during 1st year shall be repaid in 11th year, loan availed in 2nd year shall be repaid in 12th year and so on.
Policy measures- Special thrust for encouraging SC/ST entrepreneurs and woman enterprises
KIADB and KSSIDC directed to reserve 22.5% of the allottable land/shed
for SC/ST entrepreneurs
Entrepreneurship Development Programmes for SC/ST entrepreneurs
Concessions, incentives, subsidies available
• Investment subsidy
• Exemption from stamp duty
• Reimbursement of land conversion fee
• Concessional registration charges
• Exemption from entry tax
• Subsidy for setting up effluent treatment plant
• Exemption from electricity tariff
• Interest subsidy for water harvesting, technology up-gradation
• Reimbursement of cost of preparing project reports
Policy measures- Additional Package of Incentives & Concessions to Focused Manufacturing Sectors and Focused Service Sectors
Focused Manufacturing sectors
Aerospace Sector
Automotive Sector
Machine Tool Sector
Steel and Cement Sector
Incentives , concessions and exemptions available
Interest free loan (On 100% of VAT + CST from the date of commencement of production)
Electricity duty exemption is available to Ultra Mega and Super Mega projects for period of Nine years
Policy measures- Incentives and concessions for Large, Mega, Ultra Mega, Super Mega enterprises
Exemption from Stamp Duty and Reimbursement of Land Conversion Fee
Other than Hyderabad Karnataka Area
Zone 1: 100%, Zone 2: 100%, Zone 3: 75%, Zone 4: Nil
Hyderabad Karnataka Area
HK Zone 1: 100%, HK Zone 2: 100%
Concessional Registration Charges
Concessional rate of Rs. 1.00 per 1,000 rupees
Other Exemptions , incentives and concessions
Exemption from Entry Tax (eligible for 100% exemption on entry of Plant & Machinery)
Subsidy for Setting up Energy Effluent Treatment Plant (Exemption up to 50% of cost)
Interest free loan (On 100% of VAT and CST paid from commencement of production)
Definitions
As per MSMED “Manufacturing Enterprises” categorized as follows
Micro enterprises- Investment up to Rs 25 lakh
Small enterprises- Investment Rs 25 lakh to Rs 500 Lakh
Medium enterprises- Investment Rs. 500 lakh to Rs. 1000 lakh
As per MSMED “ Service enterprises” categorized as follows
Micro Enterprises - Investment up to 10 lakh
Small Enterprises - Investment Rs 10 lakh to Rs 200 lakh.
Medium Enterprises – Investment Rs 200 lakh to Rs 500 lakh
Large Enterprises- Investment in Fixed Assets Rs. 10 crore to Rs. 250 crore
Mega Enterprises- Investment in Fixed Assets Rs. 250 crore to Rs. 500 crore
Ultra Mega Enterprises- Investment in Fixed Assets Rs. 500 crore to 1000 crore
Super Mega Enterprises- Investment in Fixed Assets more than Rs. 1000 crore
Value of eligible Fixed assets total investment made on land, building and plant and machinery and other productive assets directly related production process
Employment: Direct Employment shall mean employees who are on the rolls of the respective companies which will include contract labour engaged in production line. It will however not include casual labour The percentage of contract labour engaged should not exceed 30% of total labour force.
Definitions
Date of Commencement of Project implementation: Date on which the unit has taken any one of the following effective steps and whichever is early
Date of entering lease or sale agreement of the premises(either land or building)
Date on which possession certificate of the plot or shed is taken from KIADB/KSSIDC or any other agency
Date of approval of building plan by competent authority
Date of release of first instalment of loan from Financial Institution /Bank
Date of placement of first purchase order for plant and machinery.
Date of Commercial Production: Date of issue of first sale invoice after trial production either by a new unit or after expansion diversification/modernization.
Definitions
Expansion/Diversification/Modernization: New manufacturing facilities set up by an existing enterprise within the existing facility or in a new site or in an adjacent vacant site for manufacturing a product already being manufactured with or without up gradation of technology or the process and/or a totally new product would be treated as expansion/diversification/modernization for the purpose of incentives under the policy or increase the installed capacity by at least 25% of the declared capacity or average production during immediate 3 years prior to commencement of the commercial production in the expanded / modernized / diversified enterprise, whichever is more and has to make an additional investment of at least 25% of the original fixed investment of the existing unit (Original fixed investment means, the investment prior to first sale invoice raised for the initial investment i.e prior to expansion / modernization / diversification program).
Annexure 1: LIST OF SERVICE ENTERPRISES ELIGIBLE FOR PACKAGE OF INCENTIVES AND CONCESSIONS
Applicable to projects approved by DLSWCC, SLSWCC and SHLCC only
1. Logistics facilities supporting to industries.
a) Container Freight Station Operators,
b) Warehouses,
c) Cold Storages and cold chain for logistic support to Food Processing Industry
d) Material handling equipment (except transport vehicles and good carriers)
2. Powder coating / Painting Enterprises, Industrial paintings, etc., engaged in job work.
3. Weigh bridges and health care facility set up within the KIADB KSSIDC industrial areas / estates.
4. Material / Product Testing Laboratory.
Annexure 2: LIST OF INDUSTRIAL ACTIVITIES / ENTERPRISES NOT ELIGIBLE FOR INCENTIVES AND CONCESSIONS
1. Breweries & Distilleries of all types excluding winery
2. Khandasari and Jaggery making enterprises
3. Photo Studios & Color Processing and instant photo printing Enterprises
4. Photo Copying / Xerox Machines / Fax Machines /Data Entry/Data Recovery, enterprises
5. Fertilizer Mixing units
6. Units engaged in Re-packing of Drugs / Medicines / Chemicals, without any processing or value addition
7. All types of Saw Mills excluding manufacture of particle board/ Low Density Fiber Board (LDF)/Medium Density Fiber Boards(MDF)/High Density Fiber Boards(HDF)
8. Beedies / Cigarettes / Cigars / Gutka & Tobacco based products manufacturing enterprises.
9. Azoic / Reactive Dyes manufacturing enterprises
10. Fire Cracker manufacturing enterprises
11. Industries manufacturing and / or utilizing Ozone depleting substances
12. Laundries including Power Laundries
13. Brick making Enterprises including Cement Hollow Blocks excluding Wire Cut & Fly Ash Bricks and Refractory Bricks parks etc.
Annexure 2: LIST OF INDUSTRIAL ACTIVITIES / ENTERPRISES NOT ELIGIBLE FOR INCENTIVES AND CONCESSIONS
14. Poultry excluding hatcheries
15. Popcorn and Ice candy making Enterprises excluding Ice Cream Manufacturing
16. Coffee roasting and Grinding units having installed capacity of less than 2 MT/day capacity.
17. Clock and Watch / Mobile / Computer and Hardware equipments repair enterprises
18. Cassette recording [Audio & video] enterprises
19. Cyanide Manufacturing enterprises
20. Mining and Mining Equipments
21. Lime kiln / burnt lime units
22. X-ray clinics and clinical / pathological laboratories and scanning,M.R.I. testing enterprises
23. All industries of mobile nature like rigs, concrete/tar mixing plants/hot mix
plants including site oriented industries.
24. Units engaged in manufacture of Chrysolite Asbestos (White crystal)
25. All types of Saloon / Spas / Massaging Centers etc.
26. All types of hotels/restaurants/resorts/amusement parks etc.
Annexure 3A: TERMS & CONDITIONS FOR SANCTION OF INCENTIVES AND CONCESSIONS
Irrespective of the location, industrial activities / enterprises as listed in Annexure – 2
will not be eligible for any incentives and concessions.
Enterprises can avail incentives and concessions under only one policy of the Industries Department
Investment Promotion Subsidy available only to enterprises availing a minimum of 50% term loans on eligible fixed assets from Financial Institution/Banks.
No restriction on quantum of loan to be availed from financial institutions for availing tax based incentives.
The value of Fixed Assets will be the basis for computation of quantum of investment promotion subsidy.
Investment promotion subsidy sanctioned in 2 or 4 installments.
Annexure 3A: TERMS & CONDITIONS FOR SANCTION OF INCENTIVES AND CONCESSIONS (Continuation…)
VAT/CST related Incentives:
Interest free loan on VAT and CST means, the eligible enterprise have to pay the prevailing VAT and CST and later claim interest free loan of net VAT and CST from Commerce and Industries Department.
VAT related incentive will be provided only with reference to the sales attributed to the production from the new investments.
The sales made out of the goods imported or stock transferred or purchased from other States and sold within Karnataka without substantive value addition of at least 25 percent of the input cost will be specifically excluded from purview of the VAT incentive.
On introduction of GST, no compensatory incentive will be provided in case of abolition of CST or any other tax or change in rate of tax, which currently accrues to the State Government. However VAT related incentive will be converted to SGST related incentive with scope as originally approved
Annexure – 4: STRATEGIES FOR EXPORT PROMOTION
Encouragement of SEZs, Agro & Food Processing Sector, Textiles & Readymade Garments Sector- Textiles Policy 2013, Chemical Industry Sector, Pharmaceuticals Sector, Engineering Sector (Automobile, Aerospace & Precision Tools), Electronics Sector, Gems & Jewellery Sector, Plastic Sector, Leather Sector, Handicrafts Sector, Marine Products.
Incentives and Concessions:
Exemption from Entry Tax: For 100% EOU and Min Export Obligation of 50%, entry tax exemption at 100% is available.
Refund of Certification Charges
Refund of Cost incurred for Export Consultancy/Market Intelligence Studies (For exporter who have TO less than 5 crore p.a
Brand Promotion and Quality Assurance (50% expenses reimbursed): For exporters having TO less than 5 crore for setting warehouse, showrooms, display of international dept stores, testing and registration charges
Export-Import Management: 50% of certification course charges reimbursed.
Annexure – 4: STRATEGIES FOR EXPORT PROMOTION (Continuation…)
Incentives and concessions available
Support for Establishment of Container Freight Stations and other export infrastructure (25% of cost of project with a ceiling limit of Rs. 200 lakh)
Support for creation of Export facilitation facilities, R&D and testing services: Rs. 50 lakh or 50% of cost whichever is less.
Market Development Assistance:
South American Countries (Assistance up to ` 1.75 lakh)
Other Countries (Assistance up to ` 1.50 lakh)
Reimbursement of Export Credit Guarantee Insurance: Max of Rs. 50,000 or 10% of premium paid towards Export Credit Guarantee Insurance.
Support for development of exports in Gherkins, Rose Onions and Floriculture: Financial assistance up to 10% of procurement cost of seeds and training expenses.
>A High Level Departmental Monitoring Committee
>strengthening the grass root level offices
>Strengthening of Karnataka Udyog Mitra, KIADB and KSSIDC
>Following milestones are set for ensuring periodical progress
By the end of the year
Approval of investment ( In crores)
Anticipated employment generation (In Lakhs)
2014-15 50,000 1
2015-16 2,50,000 3.5
2016-17 3,50,000 7
2017-18 4,25,000 11
2018-19 5,00,000 15
To inform companies about the various incentives, concessions and exemptions available
To guide companies about investment opportunities
To liaison with the Government departments and see that the companies get maximum benefit of the policy